Rumor mill: Two Microsoft Shareholders Want Satya Nadella to Kill Xbox, Bing, and Surface

[dkediger]

..... I really like Microsoft's products and I don't want to see them become the next IBM.

Interesting example. Although IBM wasn't really in the consumer space as we recognize it now, they did lose control of whatever end user hardware share they had and shed it to focus on devices and enterprise. While they do well in the stratosphere of computing, they have very little practical/applied direct impact in the day to day world of tech.

 

[MrWhiteman]

Sorry guys. That the Xbox earns MS money is incorrect. .

They probably do it for the same reason Google make the Chrome browser. Image / brand recognition. UK supermarkets sell beer below cost at Christmas time and sometimes even petrol. Just to win over customers.

 

[xchange]

Okay. In that case the article was either poorly written, or it considered only the most recent financial period and you guys don't understand the difference between annual profitability and overall profitability. I linked to a document that explains the situation for the Xbox. If you need more Google it yourself. There are dozens of articles explaining the overall financial failure Xbox has been so far...

So no, the Xbox division is not healthy. The finance guys would have no reason to get rid of it if it was. For the PS3 the overall losses were even worse...

Understanding that point is essential to making sense of why spinning off the Xbox division is even an issue.

If I had only run across one article stating that consoles are doing good business I might be inclined to take your word for it, but I've seen numerous ones that disagree with you for weeks.

 

[bsayegh]

Kill Xbox? The only MS product that anyone outside of PC gamers considers cool? The big box they can use to promote new technologies and push their own products, like WP and Kinect? Kill that thing? Makes all the sense in the world.

They COULD kill Surface, but if the numbers are accurate, the device is picking up speed. I have never seen a Surface in the wild, but I am guessing there have to be people out there using it, right? I would care THAT much if they ended it as long as other OEMs were building similar devices, but if it is gaining market share they should keep it.

Bing as a search engine has its ups and downs. I actually feel like it used to be a lot better. Recently I have noticed a lot of weird search results that seem more like links to spyware than anything else. I don't know, maybe I have a virus or something? They use Bing for a lot of stuff outside of the website, and I believe iOS uses Bing too, so I cant imagine them giving it up.

 

[anony_mouse]

Microsoft putting all there (sic) services on IOS and Android?

This seems to me a very good idea. Limiting their mobile services to what is (let's be honest) an unpopular platform seems like a good way to kill those services. If mobile is so important to Microsoft, it is idiotic to handicap themselves in that market!

 

[bsayegh]

This seems to me a very good idea. Limiting their mobile services to what is (let's be honest) an unpopular platform seems like a good way to kill those services. If mobile is so important to Microsoft, it is idiotic to handicap themselves in that market!

They should flood the App Store and Google with apps. Create things that people love, leave them in the store for awhile, and then pull them all at once! That way people would see what they are missing.

At the very least, they could stop making apps for other devices moving forward. I guess that all depends on them writing apps that people really want.

 

[ntice_521]

Why do you guys keep saying this? Any source? Everything I see disputes that claim? Profits were only made during some of the more recent quarters. Overall, Xbox 360 lost about 2 billion (give or take a few hundred million) and was a drag on the company. That is not a modest success.

Xbox360 is still selling well and has perhaps 2-3 years left. The ps2 made a fortune after the ps3 came out. There is overlap.

 

[jlzimmerman]

Why do you guys keep saying this? Any source? Everything I see disputes that claim? Profits were only made during some of the more recent quarters. Overall, Xbox 360 lost about 2 billion (give or take a few hundred million) and was a drag on the company. That is not a modest success.

I do not agree.

Xbox as a game console may have seen losses on paper, but it has given Microsoft other tangibles and intangibles that have made their gaming side of the house flourish. Their partnerships with media outlets such as Netflix. Their partnerships with game developers. The enormous amount of money they make off XBL advertisement. The money they make off XBL Gold memberships. Their lease of Kinect technology to non-gaming enterprises and organizations.

Microsoft made money on every Mass Effect game sold on the PS3 because they were the publisher, then made money when EA took over as publisher for ME2 and ME3. Owning the Halo franchise alone has made Microsoft almost a billion dollars in games, books, media, and other merchandise sales. The Pizza Hut app on XBL made Pizza Hut $1 Million in revenue in just four months. Microsoft gets a kickback in that, even if that kick back is only loyalty. Just a few of dozens of examples.

This is why Microsoft has made the XBOne a total entertainment console and not just a game console. Because they know where the $$$ is.

 

[jmshub]

Someone else finally said it, but XBox hasn't been successful. Especially with the costs of repairing all of the red-ringed 360s, they lost money on XBox. The only money they've made on Xbox hardware is the last few quarters of the 360 where the design investment has been paid in full.

If Microsoft were to do anything with XBox, they wouldn't outright close it, or sell it to a competitor like Google or Apple. They would likely spin it out to a separate company. Possibly one that is still wholly owned by Microsoft (for instance, the way General Motors did with Delphi in the 80s). Anyway, that is all conjecture. There is no way to know what Nadella has planned for Microsoft.

 

[anony_mouse]

They should flood the App Store and Google with apps. Create things that people love, leave them in the store for awhile, and then pull them all at once! That way people would see what they are missing.

At the very least, they could stop making apps for other devices moving forward. I guess that all depends on them writing apps that people really want.

Just curious - why are so many people here against putting MS services on other platforms? Surely if they are good services, it's good to let people use them?

 

[jmshub]

They should flood the App Store and Google with apps. Create things that people love, leave them in the store for awhile, and then pull them all at once! That way people would see what they are missing.

At the very least, they could stop making apps for other devices moving forward. I guess that all depends on them writing apps that people really want.

How does that make business sense in any way for them to spend all of the time and development costs to make a product just to show people what they are missing. I have said it on here before, but Office is the number one business in Microsoft. They make more money than servers, Windows desktop, and WAY more than Windows Phone. If Microsoft doesn't make a good Office client for Android and iPhone, people won't switch to WinPhone to get it, they will switch to some other office software. And people deciding that some other productivity suite is "good enough" is more dangerous to Microsoft than low mobile market share.

 

[bsayegh]

Just curious - why are so many people here against putting MS services on other platforms? Surely if they are good services, it's good to let people use them?

I am not against it on principle. I just think that having apps unique to WP will help sell the product. I really don't think people in general are impressed enough with the Live Tiles to convert from their current OS to a different one. Unique apps serve as an incentive to try the OS.

 

[bsayegh]

How does that make business sense in any way for them to spend all of the time and development costs to make a product just to show people what they are missing. I have said it on here before, but Office is the number one business in Microsoft. They make more money than servers, Windows desktop, and WAY more than Windows Phone. If Microsoft doesn't make a good Office client for Android and iPhone, people won't switch to WinPhone to get it, they will switch to some other office software. And people deciding that some other productivity suite is "good enough" is more dangerous to Microsoft than low mobile market share.

Probably so. I was only being half serious. Like it would be interesting to see them do it, but I don't think they would. It took MS a long time to come out with Office for iOS. They were understandably reluctant. For a while it was a selling point for WP.

But I wouldn't underestimate how dependent people are on Office. At the very least, they could offer a deeper experience on WP than on other devices. Like more Excel function and such.

 

[jmshub]

Microsoft cannot be profitable by keeping Office unique to Windows Phones and tablets. Now, they can leverage their platforms to make the experience better with WinPhone and Office, the built in integration with Skydrive, for example. But not having full-featured Office on every platform doesn't help Office OR windows Phone.

I agree, Office is a great product. Every company I have ever worked for uses Office exclusively. I am Microsoft certified Office trainer. I see the value. But there are LOTS of people trying to get into that space. Open Office, Libre Office, Apple's documents platform. Google docs. They are all investing in the experience. If they work better in Android and iOS (95ish % of the mobile market by the way, combined), then people will start using these competitors, because many of them don't care about genuine name brand Office, many of them just need to get a document written to ship off to the boss before the end of the day. Microsoft will erode their Office market if they don't have good versions of Office everywhere they can.

 

[xchange]

How does that make business sense in any way for them to spend all of the time and development costs to make a product just to show people what they are missing. I have said it on here before, but Office is the number one business in Microsoft. They make more money than servers, Windows desktop, and WAY more than Windows Phone. If Microsoft doesn't make a good Office client for Android and iPhone, people won't switch to WinPhone to get it, they will switch to some other office software. And people deciding that some other productivity suite is "good enough" is more dangerous to Microsoft than low mobile market share.

This is almost precisely what both Paul Thurrott and Mary Jo Foley just said on Windows Weekly this week, and I totally agree. MS needs to lose those old protectionist codgers from the 90's era on their board of directors. Get MS software out on every money making platform ASAP. I can't even begin to fathom why MS is so resistant to putting software like Office on platforms that have 90% of the market share :shocked:. IE still needs work too. IE for me is basically nothing other than a browser I can use to download Chrome or Firefox on my PC (I stole that line from Paul ). And while I'm at it, it was the decision to tie Windows 8 so much to an email account that drove me back to Windows 7. Bad enough I can't use any mobile device without one, but my home computer is where I draw my line in the sand.

 

[dkediger]

Well, that's really the way they've been approaching Office 365. If you want a comprehensive, cross platform service that has a fairly consistent and usable experience across those platforms, its Office 365 and its not even close.

 

[Huime]

no one is more influential than Bill. Nothing will change until Bill says so, or dead.

 

[ipinsao]

I think MS should definitely sell Xbox but keep mobile and Bing. Bing and IE are integral to Microsoft ecosystem but Xbox is just a waste of time and resources. Let Sony and Nintendo fight for those scraps while MS stays laser focused on the PC platform, enterprise and devices and services.

Sent from my Yellow Nokia 1520 (RM-937)

XBox is key in owning the living room which is the new battle ground for consumer electronics and right now XBox is way ahead of the competition. If Microsoft bought Netflix they would be on top. It would be great for the short term if they sold these small divisions but really bad for the long term. Microsoft can't always depend on Office and server tools as a money maker.

 

[berty6294]

The only one that's even questionable is Surface. Xbox puts Microsoft on the TV and in the living room, no way they are going to get rid of that. Bing is probably the most important thing Microsoft has! Bing powers every single product Microsoft has. Surface is probably the least important department.

 

[jmshub]

Bing powers every single product Microsoft has.

Why does Bing have to be a Microsoft product for this to continue to be the case? Just for conversation, Microsoft could spin Bing off into it's own company, and continue to partner with Bing for integrated search for Windows.